Finding Safe High Dividend Stocks - ShareDividends.com.au - Australian Company Share Dividend History, Forecasts, Ex-Dividend Dates for Share Investors

Safe Dividend Shares are those stocks that consistently lift their dividend eash year. Raising the dividend usually signals that the company is healthy and increasing earnings.  Finding and  long term investment in stocks that consistently grow dividends are one of the most reliable ways to grow wealth over time.

The Safe Dividend Shares list has been constructed from the ShareDividends.com.au historical dividend database. This includes dividends for all Australian ordinary shares over the last 13 years. By looking at dividends paid in each of the last six years, we have selected only the stocks that have increased the total value of grossed up dividends in each of the last five years.

This list has a twist. It includes the value of franking credits in the total dividend value. This may be different to comparable lists found elsewhare.

Surprisingly, this is a very select list. Of approximately 2,300 shares listed on the Australian Securities Exchange, there are only 28 ordinary shares and listed funds that meet our criteria of continuous dividend growth. Its worth noting that this list would be much longer if we ignored the aberation of 2010 financial year as many stocks that reduced their dividend in 2010, increased 2011 dividends to above 2009 levels.

Note that these are not necessary high yielding stocks, although your can see from the list that there are several yielding greater than 6%. Many on the list are growth stocks, reinvesting profits into their businesses for future profits.  If you already hold any of the stocks on this list then their performance has probably  justified you investment decision.

Sectors that fair prominantly in this list include Retail, Health Services and Food Retailing.

As an additional check we should look at the Payout ratio to get an additional measure fo the sustainability of the dividend payouts. For dividends to be sustainable they should be paid out of current year earnings and not out of retained profits or worse still – borrowed funds.